BP Migas expects Sempra LNG deal early October

BP Plc-oparted tangguh LNg project is exepcted to sign a final deal to supply liquefied natural gas (LNG) to U.S. firm Sempra Energy in early October, oil and gas watchdog BP Migas was quoted by Agency as saying Thursday on Thursday.

"BP will supply Sempra with 3.7 million tonnes per year for 20 years," BP Migas head of marketing Djoko Harsono told reporters.

"We have agreed on substantive issues but there are small issues that need to be solved. I am optimistic that we will see the signing in the first week of October," he said.

Officials from British oil giant BP could not be reached for comment. The major energy company plans to build two new LNG plants with a combined capacity of around seven million tonnes of LNG per year.

Rachmat Sudibyo, chairman of watchdog BP Migas, said on Thursday the Tangguh LNG complex would cost around $4.7 billion, more than the $3 billion previously estimated, including development of upstream activities and two LNG plants with a capacity of seven million tonnes a year.

"BP plan to build two LNG plants but there is an option to build a third if the market is opened," Sudibyo said.

Last month, BP signed a deal with South Korean utility K-Power that agreed to take 600,000 tonnes per year LNG starting in 2006 for 20 years. K-Power also has the option to buy an extra 200,000 tonnes per year to 2010.

South Korean steel maker POSCO Co. in July inked a $1.9 billion deal with the Tangguh LNG consortium to buy 550,000 tpy over 20 years starting in 2005.

China's CNOOC Group in 2002 signed a final contract to purchase 2.6 million tonne per year.